Artificial intelligence (AI) is becoming an increasingly important part of financial services and payments.
Banks, payment providers and fintech firms are already using AI to detect fraud, improve customer service and automate processes. The next phase could see AI play a much more direct role in how consumers shop and pay.
For UK retailers, this raises important questions around innovation, competition, security and regulation.
September brings AI further up the policy agenda
September 2026 has seen a number of developments highlighting the opportunities and risks associated with AI in financial services.
On 22 September, major banks raised concerns about the risks associated with AI-powered shopping agents. These systems can increasingly search for products and potentially make purchasing decisions or initiate transactions on behalf of consumers. Concerns include fraud, data protection, consumer choice and who should be responsible if something goes wrong.
This is particularly relevant to retailers as AI begins to influence the customer journey before a consumer even reaches a retailer's website. If consumers increasingly rely on AI assistants to find products, compare prices and make purchases, these systems could become an important new intermediary between retailers and their customers.
The issue is not simply technological. It also raises questions about competition and transparency. Retailers will need to understand how products are selected and presented by AI agents, and whether businesses are able to compete fairly for visibility within these new digital channels.
On 30 September, the Bank of England's Financial Policy Committee also highlighted the potential financial stability implications of AI. The Committee recognised the potential for AI to increase productivity and support innovation, but also identified risks associated with cyber security, operational resilience and increasing reliance on technology providers.
The FCA's approach
These developments follow the Financial Conduct Authority's Mills Review, published in July 2026.
The Review examined how AI could reshape retail financial services through to 2030 and beyond. It identified four areas of significant change: firms' operations, consumer journeys, competition and market power, and fraud and cyber risks.
The FCA's research found that 20% of UK retail financial services consumers – around 11 million people – could be likely to use AI capable of acting autonomously within pre-set goals.
The FCA has also made clear that it does not currently intend to introduce a separate AI-specific regulatory regime. Instead, it plans to rely on its existing principles-based framework while considering how regulation and supervision may need to adapt as AI develops.
Why this matters to retailers
AI could deliver significant benefits across the payments ecosystem. Better fraud detection could reduce losses and payment declines, while greater automation could make transactions faster and more efficient.
However, there are also potential risks.
If consumers increasingly delegate purchasing decisions to AI agents, the companies controlling those agents could gain significant influence over which retailers, products and payment methods consumers see.
There are also questions about accountability. If an AI agent makes an unauthorised purchase, selects an inappropriate payment method or is manipulated by fraudsters, it needs to be clear where responsibility lies and what protections apply to consumers and businesses.
For retailers, ensuring that AI develops within a competitive and transparent payments environment will therefore be important.
Getting the balance right
The UK has an opportunity to support significant innovation in AI and financial services. But as adoption accelerates, regulation will need to keep pace with new risks without unnecessarily restricting innovation.
For retailers, the priorities should include secure and resilient payment systems, effective competition, transparency in AI-driven customer journeys and appropriate protection for consumers and businesses.
AI has the potential to make payments faster, safer and more efficient. The policy challenge is ensuring that these benefits are realised across the market, rather than creating new dependencies or barriers to competition.
As the UK's AI and payments frameworks continue to develop, retailers will have an important role in ensuring that innovation delivers practical benefits for businesses and consumers.
